From 1903 till 1908, he studied mathematics, physics, philosophy, philology, law and economics, at the universities of Göttingen, Munich and Berlin.

In 1908, he obtained his doctorate under Paul Hensel, at the University of Erlangen, on a mathematical topic, Russell's paradox.

After the war, Rüstow, then still a socialist, participated in the November Revolution, and obtained a post at the Ministry of Economic Affairs, working on the nationalization process of the coal industry in the Ruhr Area.

In the 1930s, the climate in Germany became too unfriendly for Rüstow; he was blacklisted in 1933 and fled to Switzerland, where he was offered a chair in economic geography and history at the University of Istanbul, Turkey.

In Istanbul, he worked on his magnum opus, Ortsbestimmung der Gegenwart (in English published as Freedom and Domination), a critique of civilization.